NHOA S.A. (NHOA) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to our investor call regarding our full year 2021 results and 2022 highlights. The investor call will be opened by Mr. Carlalberto Guglielminotti, CEO of NHOA Group. And we have the pleasure to have with us today Mr. Nelson Chang, Chairman of TCC and President of NHOA Group. With Mr. Guglielminotti and Mr. Chang to explain all details about the full year 2021 results and 2022 highlights, Mrs. Ilaria Scarinci, Group Financial Officer; Mr. Giuseppe Artizzu, CEO of NHOA Energy and NHOA Group General Manager; and Mr. Gabriele Tuccillo, Chief of Staff, In Charge of Strategic Planning and Investor Relations. Mr. Guglielminotti will open the call with the main corporate and industrial 2021 highlights. And then we'll leave the floor to the financial analysis by Mrs. Ilaria Scarinci. It will be followed by Mr. Chang's overview. At the end of our presentation, the management team will be available to answer any questions you may have. Please note that this investor call will be recorded. If you could not attend the whole call, the webcast and the presentation will soon be available on our corporate website on the dedicated page. [Operator Instructions]. Before we begin, I just want to point out that any forward-looking statements made during today's call are subject to the risks and uncertainties mentioned in the safe harbor statement, which is included on Page 2 of today's presentation. This also includes the risk that the transactions discussed during today's call remains subject to the standard conditions for this type of transaction as well as any other risks and uncertainties associated with the execution of transactions of this type. And as customary, the call will be governed by that language. So with that, I will now leave the floor to Mr. Carlalberto Guglielminotti.

Thank you very much, Chiara, and good morning, ladies and gentlemen, and thank you for being with us today. It's really a pleasure for me to talk to you today with Mr. Chang, our President, that honored us with his presence in person for our investor call. I will be happy to leave the floor to him after my brief presentation on our major industrial and corporate highlights and after the deep dive of our financials with our Group CFO, Ilaria Scarinci. So let me start with some figures, just to give you a general overview. NHOA successfully matched the mid-range of its 2021 guidance, setting what is a clear trajectory towards 2022 expectations and now trying a new growth path. Almost EUR 33 million revenues, 3x, compared to full year 2020, backlog close to EUR 200 million, up 5x compared to 2020, giving clear visibility towards the EUR 100 million to EUR 150 million revenue 2022 target. And last but not least, certainly, our EUR 140 million Rights Issue, successfully completed with 1.4x oversubscription, confirming the market trust in NHOA and NHOA's Masterplan10x. I mean 2021 has been a transformational year across all Global Business Lines. In Energy Storage, is confirmed itself on the core and the backbone of NHOA activities. More than 2x revenues year-on-year, record order intake to over EUR 200 million and more than 1 gigawatt hours of projects under development. eMobility on its turn accelerated NHOA's increasing revenues and other income. I mean, 5x increase in sales compared to 2020, manufacturing capacity increased to over 2,000 units per week and 18% conversion rate on Stellantis brands. EV Fastcharging Infrastructure on its turn leveraging on NHOA's technological base and operational backbone, closed 2021 with over 700 fastcharging points online and under construction and over 800 sites in pipeline. Then looking generally to the milestones we achieved in 2021, it sounds a bit surreal because it looks to me, how can I say, a geological year. But we started 2021 with the JV with Stellantis because you will remember that at the end of 2020, we essentially signed an MOU with Fiat Chrysler, while it was January 2021 when we signed the joint venture agreement with Stellantis. Then in March and April, TCC acquired over 60% of our corporate capital from ENGIE. And we started the new adventure to TCC becoming NHOA, then closing the joint venture in May with Stellantis and incorporating Free2move eSolutions, which is our Global Business Line devoted to eMobility. Then we announced our master plan and the launch of the Atlante project in July, launching the largest EV infrastructure network, coupled with Renewables and Storage. Then -- this was July. In September, we successfully completed the tender offer. We launched the Atlante with the official kickoff that has been in October last year. And between November and December, we completed the EUR 140 million Rights Issue. So it has been an intense year from the corporate perspective, while we never reduced the intensity on the business and on technology. I mean you will remember that last year, in February, we launched the 2023 technology road map, a technology road map that still is the backbone of all our technological developments. Then we announced 10-megawatt hours extension of the microgrid in California. We launched the master plan and eventually, thanks to the support of TCC, the new equity story of NHOA together with TCC materialized with over 400-megawatt towers contracts in Taiwan and over 200-megawatt towers contract in Australia, reaching over 1 gigawatt towers of projects under development globally. Last but not least, we launched and opened our new global engineering center in Milan without keeping focus on the most important asset we have, which are our people. Our people that are now, let me say, protected by a new framework, a new framework, which is around sustainability, which is around inclusion, around cultural and value aspects that have been historically characterizing NHOA, that now are even more intensively put at the center stage of all our strategies. Then all that while we increased our headcount from 136 people at the very beginning of the year to over 300 people at the end of 2021. Then Giuseppe, I will leave the floor to you for a quick deep dive on the highlights for the Energy Storage business.

Thank you, Carlalberto. The headline number that summarizes our performance in 2021 is the transition of our order backlog from over EUR 30 million to just short of EUR 200 million. I think that is telling to what we have built during the year. That translating a portfolio project in construction, preconstruction of around 1 gigawatt hour, of which around 300-megawatt hour are going to come online by the end of this year. And this is across our 3 core geographies, our base in Europe, the U.S. franchise that developed throughout the 3 years that we spend within the [ energy ] group and our new frontier, which is Asia Pacific, that now represent over half of our order backlog across Taiwan, of course, Australia and South Pacific Islands. This is supported by an operational presence that from Europe, from Milan, from our Cosio industrial plant this year, which are now almost 0.5 gigawatt hour of capacity, is now spread to the United States, Houston hub and in Asia Pacific through the 2 hubs of Taipei and Perth in Western Australia. And surprisingly, this has been boosted by our core resource, which is our pool of talent. We grew from 114 to 172 people in the year, so a 50% increase, which I can guarantee you in the current labor market, condition extremely tight, in particular for the kind of professionals that we look for. It is a major achievement, something we are -- which we are proud of as manager -- as entrepreneurs. So a transformational year. Carlalberto, back to you.

Thank you, Giuseppe. And going on with our Global Business Line, eMobility. Certainly, the most important data in KPI we have is the conversion rate at the Stellantis level. A conversion rate that progressively increased from 0, I mean, in May 2021 to over 18% at the end of the year. And this is the blended percentage, which is the average, obviously, between the former Fiat Chrysler brands and the former PSA brands that now merged into Stellantis. Most importantly, the manufacturing capacity increased from less than 500 units per week in -- at the end of 2020, beginning of 2021 to over 2,000 units per week at the end of 2021. With the targets, and that's in anticipation to reach over 6,000 units per week by the end of this year. Most importantly, the achievement and the industrial and operational achievement of the Drosso projects, essentially the largest Vehicle-to-Grid projects, we installed back in 2020 and increased to over 30-megawatt power and over 600 vehicles connected over the course of 2022. It's been extremely successful, and the construction is ongoing and will be completed very, very soon. In parallel, the product -- launch of our products is absolutely in line with the technology road map. You will certainly remember that we have given to our stakeholders, including the market, a clear path towards launching products at different quarters. So everything is absolutely on track. Everything has been respected. We started with the easyWallbox, then we launched the ePublic, then the eProWallbox, and all the other products will be released according to the technology and product road map. Last but not least in eMobility, we have seen an acceleration on our activities in second-life. Second-life is one of the few ways we have to secure sustainability of the battery business in the long term and after, let's say, 5 years, of work on those aspects, our battery aging models and the life test that we are carrying out are eventually giving us a lot of excitement, a lot of exciting news, and the development of usage of second-life batteries is becoming more seriously a reality. A reality that will certainly change the paradigm of the sustainability of the electric business. Then last point on the EV Fastcharging Infrastructure. In terms of highlights, as said, over 700 charge points online and under construction, over 800 sites in pipeline, and with the first launch of the fastcharging infrastructure in Piedmont in Italy in October and November last year. Then the iconic award of the Milan, Linate and Malpensa Airports, together with Free2X, will represent one of the most iconic contracts secured in one of the most iconic infrastructures ever installed because it's exactly in front of the airport. And then the partnerships we signed with Sonae Sierra for malls and residentials and real estate premises with LDC Hotel for luxury hotels and related electrification. And last but not least, all the private areas in which we are installing hundreds of fastcharging station and hundreds of points of charge very, very, very fast at the pace, which is really impressive. I mean we installed 2x what has been in 1 quarter, 2x what has been installed by Ionity to give you an idea in years or more than half of what has been installed by Tesla in the last 10 years in terms of size. So we are really satisfied with that. And certainly, that's a fantastic starting point for 2022 to even potentially accelerate the development of the incentive plan. Then having introduced the major industrial and highlights, I will now leave the floor to Mr. Ilaria Scarinci, our Group CFO, to deep dive on the financial aspects of our results. Ilaria, the floor is yours.

Thank you, Carlalberto. Good morning, everyone. Really glad to be here to discuss the 2021 NHOA's results. As we said, in 2021, NHOA successfully met its revenue guidance, reaching EUR 33 million of revenues among the 2 Global Business Line, Energy Storage and eMobility. Gross margin is in line with expectations considering the mix of revenue. Cost of personnel and OpEx in line with company growth and with the setup of cost base needed to execute the EUR 193 million of firm orders that we have in our backlog. Depreciation and amortization account to EUR 5 million. Considering the exceptional year, we obviously had some onetime events on the costs related to TCC acquisition in the establishment of the JV with Stellantis. The incentive plan accelerated by the change of control. Without those onetime events, we would have an adjusted EBITDA [ in minus ] of EUR 18 million. Going to the key figures of NHOA. During 2021, NHOA experienced a very positive trend in terms of revenues, so that's multiplied by 3 compared to 2020 and also confirmed the competitiveness with respect to the main competitors. And that even considering what we explained, so the effort dedicated by the management to M&A and extraordinary operations, the closing of TCC, the launch of JV with Stellantis, the successful closing of EUR 140 million of capital increases, also considering the supply chain disruption and the COVID-19-related logistic restrictions. Thanks to the great visibility that we have in terms of revenue recognition, considering the EUR 193 million of backlog just related to the Energy Storage. As of today, we confirm the expectation in terms of revenues and EBITDA breakeven in 2022. As of today, we do not see any issue in terms of -- in terms of our -- sorry, of the EUR 150 million revenues that we project on 2022. In order to execute the backlog, the continued growth on eMobility and the rollout of Atlante infrastructure, NHOA goes on with its ambitious [ hiring ] plan. The growth in terms of account at plus 75% at the end of 2021 reached, as of today, more than 300 people. The Rights Issue successfully completed in November 2021 is obviously an immediate factor in terms of our equity increased to [ EUR 160 million ]. And at year-end, we have a net financial position positive for EUR 75 million. If we want to go to the next slide, please. So going into details on Energy Storage Global Business Line. Revenues doubled compared to 2020, thanks to the delivery of critical components for the [indiscernible] project in Europe, where most of revenues were concentrated in 2021, thanks to the commissioning of Massachusetts project, the commercial operation of Sol De Insurgentes, California project expansions in U.S. and fastcharging construction in Synergy in Australia. Backlog and contracts secured reached EUR 249 million as of the end of December 2021 and are distributed in Asia, Australia and America. Again, this gives us a very clear visibility on 2022 revenues recognition. While the pipeline remains stable, even considering the EUR 200 million order intake released during the year, allowing us to set up the path to 2023 and onwards. People dedicated to Energy Storage at the end of 2021 were 136. So a 29% increase in costs compared to 2020. In addition, we have -- okay, we're going to go on the next. Okay. Thanks. So we move on eMobility Global Business Line, revenues multiplied by 6 compared to 2020 and most entirely related to the sale of eMobility -- of easyWallbox. 61% Of the sales of concentrating on Stellantis brand, and particularly FCA, as we already stated. But it's important to note that even if the JV started operations just in May 2021, at the end of 2021, had a 40% of non-captive sales. During the year, we invested EUR 5.9 million, mainly in software development as well as R&D, hardware and V2G-related activities. And also increased the charging device manufacturing capacity from 500 at the beginning of 2021 to 2,250 charging device per week at the year-end. And thanks to the internalization part of the production, we are currently at 2,875 devices per week, and we plan to reach more than 6,000 by the end of 2022. As of the end of December, we had 90 people dedicated to , eMobility, mainly concentrated on business and R&D activities and the personnel cost multiplied by 3 compared to 2020. Cost of personnel dedicated to R&D activities increased to EUR 1 million, confirming our strong commitment to the technology development. Carlalberto, back to you.

Thank you. Thank you, Ilaria. And I think we will now have to leave the floor to Mr. Nelson Chang that, as I said before, I'm really honored to have here with us today in person. Nelson will share with us his view on our results and our targets and our future growth, I mean, on what is -- now that I think about it, our first year together. And when you, Nelson and GPS became NHOA, our master plan became the guideline of our future growth and the Atlante, the fastcharging network was launched. I mean many things have been done. This is mainly thanks to you. So thank you, Nelson, for believing in our equity story, and now the floor is yours.

Good morning, everybody. Thank you very much, Carlalberto, Giuseppe, Ilaria for a detailed report of 2021 operation numbers and as well a brief introductory of 2022 business directions. I'm very happy to be here, especially after the difficulty of pandemic, traveling between Asia and Europe tend to be a little bit difficult. I must say that given the very harsh [Audio Gap] Chain problems, supply resource problems. But even given all those problems, the team is still able to deliver our prediction, our projection. And even though it's not on the high end, but nonetheless, still come in at a very strong performance. And given the fact that the Russian and Ukraine war still going on, we're still doing a business -- effective business, effective direction for Europe as well as in Asia. I think I want to say a few things about our business is I think I believe that current stabilization in the world is stabilization of energy. And given the current technology today, especially in Q1 this year, we know that there's a shortage of energy. In order to bridge the need and the use of energy with supply, the most effective way to do it is the efficiency and effective use of energy. And that is our business because EV is the most effective energy for transportation versus fossil fuel, and that's what we're doing, fastcharge, supporting EV networks throughout Europe and starting in Asia as well. Second, that energy are produced, not always when we need it and has always wasted sometimes, excess energy production without delivering to its effective use, and storage is definitely the most effective way of storing energy when actual requirement comes in. And this is 2 of our fundamental business, the charging and storage, to make the grid, the current actually integrated grid more effective and more flexible as well as more resilient to surprises. I believe that NHOA has a very effective business model going for the future. And we are very happy to work with Carlalberto and the NHOA team, not only in Europe, but in Asia to roll out what we can do best for various economic regions as well as for the Earth. And I believe 2022, you already have a glimpse of what they are doing. And I believe what we're doing will be effective and ambitious rollout plans. And we will provide, as our name will tell you, a new horizon ahead effectively in 2022. Thank you very much. I believe you have questions concerning numbers and operations. I believe Carlalberto and Giuseppe will be here to answer all of your questions. Thank you very much.

Thank you, Nelson. Thank you for your inspiring words. What I would like to highlight is how we share the same view for the future of the planet and what we want to do is to leave the planet better than how we found it. So eventually, that's the end game and that's also the mission of NHOA. So I really appreciate your words. Thank you again, Nelson, really. I think we can now move to our Q&A session. And together with the management team, we are ready to take any questions you may have. Chiara floor yours to open the Q&A session.

[Operator Instructions]. Okay, we already have raised hands. First one is Guillaume Muros from Societe Generale. I will just now ask you to open your mic. Floor is yours.

Hello, hello, everyone. Can you hear me well?

Yes.

Perhaps the first question, I have a couple, but let's start by the backbone of your business on the Storage GBL. And 2 points. First one, could you give us an overview of your current pipeline of projects? And how you are positioned there? And second point, regarding the supply chain disruptions, could you give us a bit of color there? And perhaps could you elaborate a bit on the rationale to use the Cosio Valtellino plant in Italy for commercial purposes? And how should we think of basically your, I mean, strategy and business model on Storage going forward, i.e., do we -- will supply chain disruptions structurally change your model and Storage going forward or not?

Thank you for your question. I mean many arguments, quite wide, let me say. So the pipeline, mainly storage, supply chain in Russia. I will comment at the end, but certainly floor is yours, Giuseppe, to comment on that.

So let me start from a very high-level overview of our pipeline. As you've seen from our figures, the pipeline is largely unchanged. I think that hides an improvement in the quality -- the underlying quality of the pipeline, meaning that with our increasing localized presence in the key markets and the consolidation of the key markets, we can be way more selective in what we pursue and we don't pursue. So even though on a high level, the pipeline seems to be stable, in reality, the underlying movement in the pipeline reflect the expansion of the market and the ability to be more selective on the quality of opportunities that we can pursue and therefore, on the probability of those hitting a successful outcome. It is diversified across the 3 core geographies of Europe, United States and Asia Pacific. And it is increasing in the average size of the projects. This is something which is at the same time an opportunity and a challenge because I mean it's -- the growing size of the project entails logistics challenges and procurement challenges, which cannot be hidden. So from that perspective, on one side, we welcome the rapid acceleration of market demand. On the other side, this is something that we are approaching very cautiously, given that constrained, the unprecedented, let me say, market conditions we are living in. The general health of the market is excellent from a fundamental perspective, meaning that more and more policymakers and regulators have understood the underlying strength of the business case in -- of Energy Storage as a way to stabilize grid on one side and to manage energy during the day in order to adapt the production profile of renewable energy sources to the consumption profile, which is not related. On the other hand, the tension on the supply chain, partly as -- not only for the negative effects of pandemics or the worse situation in Russia and Ukraine, but also because of the much faster-than-expected uptake in electric vehicles and therefore, the increase in demand of batteries has seen a rebound in the price of battery, significant rebound. So normally, the Q4 high prices, high price is as usual. So we do expect that the market will slow down compared to what it would have been without these kind of challenges. So that doesn't -- it's not a slow down in absolute terms, but it's a slow down, it's a relative slow down compared to the underlying potential on the market. And on the other hand, the challenges, and I'm already touching here on the second question, Guillaume, on supply chain disruption. There are significant issues of cost hedging because, in particular, battery supply materials, battery materials, metals like cobalt, nickel have very low liquidity in the [ thermal ] market, so in the [ future ] market. And therefore, even for battery suppliers, it's difficult to fix prices for delivery beyond the 3 or 6 months. And normally, the delivery of batteries on large project as an extended time frame. So these kind of challenges are affecting the market. We think they are a big challenge for the industry, but something from which the industry will come out stronger. For sure, it's a challenge as an opportunity for us, meaning that it's people that are nimble enough, fast enough, entrepreneurial enough to understand where risk is to proactively manage risk and to practically take risk when we think it's the right opportunity. It actually -- the people that will come out better from this phase. So the supply chain situation is not challenging, it's unprecedented. It is unprecedented for both negative and positive reason as far as battery is concerned. It is unprecedented for across the commodity spectrum, including important item that we take for granted, like steel. I mean, steel supply to Europe has been very significantly affected by Ukraine war. And we have to adapt also from that perspective. So our risk profile, in particular new projects, risk approach -- risk management approach to tranches extremely more careful than it was 1.5 years or 2 years ago. We try and have back-to-back commitment with clients and with supplier essentially in real time. And we are invariably demanding clients to accept hardship clauses, force majeure clauses that are something that, however, while we're almost, let me call them, academic clauses in contract because they had to be there in the past. Now they are clauses that are very likely to be used or are being used regularly on certain contracts. So for several months, this is the new normal. Within this, the role of our manufacturing capacity in Cosio Valtellino. So as you know, why are we producing -- why are we centering our manufacturing in Cosio Valtellino? And then, however, let's discuss also what that means. So as you know, Italy after Germany is the second largest industrial economy in industrial exporter in Europe. There's the reason behind that, which is the strength of the Italian District, we are in the power electronic district. So we build on that, which allows extreme competitiveness from a cost perspective and ability to -- a flexibility in ramping up and down production capacity in -- with limited fixed cost investment. Why is this important? We have essentially 3 manufacturing -- 3 core manufacturing expertise. The core, core one is the energy management system. So the ability to develop and market and design around that expertise is the intelligence of Energy Storage systems. The second one is power conversion systems. And the third one is the ability to enclose batteries from an electromechanical, so a [ containerization ] capacity, the ability to enclose batteries in the safest and most efficient environment. The mix of -- the mix of production across project changes because sometimes we buy already enclosed batteries from third-party suppliers. So we don't need to containerize, in some other cases, we do containerize. In some projects, we use our own inverters. In some other projects, we use third-party inverters. So it is extremely agile and flexible what we call manufacturing capacity, which is very much skewed towards managing smartly a deep network of subcontractor with exceptional competence in power electronics and electromechanical assembly. So this is why we are -- we continue to see Cosio as the pivot of our manufacturing capacity. We are monthly revisiting our manufacturing priorities. The imperative is competitiveness and reliability in delivery, in quality and safety. It is in a rapidly changing environment, and it would be, not only premature, but will be wrong to indicate rigid priorities. For the time being, we are happy where we are in terms of ramping up in a flexible way and being able to arbitrate between the market opportunities on one side and to build on the cost strength that comes from our district presence. Last point, that is important, of course, we are exploring deeply the potential synergies that we can have with the TCC supply chain in Taiwan across the spectrum from power electronics to electromechanical assembly. Literally, everything. So there is just obviously, it is on our trend. It's something we are working on also because geographies are being unevenly or asymmetrically affected by some of the supply chain constraints.

Maybe, Chiara, will suggest to divide if we have any questions, maybe to split them just to...

Exactly. We now have a question coming from Carlos Remeika from Covalis. His first question is, what is the plan in EV charging in Taiwan? 7-ELEVEN has more than 5,000 locations. How big will the pilot be?

Okay. I will leave to Nelson to comment, but let me be clear on this aspect. This was not an announcement of NHOA. Okay? This was an announcement of NHOA.TCC, so essentially TCC. Let me explain you why. NHOA has a master plan, which has been published in the market, which is very clear. So we have a clear road map on eMobility, which is manufacturing devices, and the clear road map on Atlante. Atlante as of today is EV Fastcharging Infrastructure with its own targets that we all know for 2025 and 2030, but exclusively as of today for Italy, France, Spain and Portugal, okay? So this is the master plan. This is what we are doing. While in parallel, and we have already seen the great results out of that in Suao and Hoping, but in parallel our majority shareholder has been authorized by NHOA to use also the brand of NHOA in the form of NHOA.TCC, okay, to carry out the business development activities in the 2 sectors in which we are absolutely free to do whatever we want globally, which are Energy Storage from the one hand and EV Fastcharging Infrastructure, okay? So this business development activity, which is carried out as a support to NHOA by our major shareholder, is a business activity, which has been extremely fruitful and extremely beneficial and the contract of the 400-megawatt hours contracts get in Taiwan are a clear evidence of that, okay? However, we have to pay attention on the fact that those are business development activities carried out by the shareholders. And therefore, as far as we are not going to announce as NHOA what we do in Taiwan, this remains an activity carried out by TCC that eventually would be obviously beneficial also for NHOA. Under your control, Nelson, I leave you -- I leave to you to comment the deal with 7-ELEVEN.

I think it's important to note that every country has its own consumer habits and consumer practices as well as its energy grid design. I think NHOA is going to be an international company, a world company. We need to understand as many information as possible about different type of consumers, how they develop charging, how they use charging, et cetera. And as well, as storage needs accessibility of different grid designs. And Taiwan has a different design versus Italy versus probably most of Europe. So by adding something a relatively big in almost 0.5 gig of storage into the power system that will help us to understand more of how Asian power grid is designed, and that information certainly will be shared with NHOA in Italy. And that knowledge will help both sides to develop future business for the world. And as you know, TCC is an industrial company. We do not deal normally with consumers. That's why we partnered with 7-ELEVEN. 7-ELEVEN has a huge branch out, layout in Taiwan and in Asia, and they know consumers. So we use their premises and work with them to supply their customers with EV charge. And from that relationship, hopefully, we will obtain information as well. As you know, in the modern world today, information and data are most important for the future development of devices and services. I think it's a synergy provided by TCC as a partner was NHOA. But again, the Taiwan action with 7-ELEVEN is only in Taiwan, not NHOA in Europe at this point, not yet. Okay, we have not discussed any of them. Okay, not yet. Okay. This is just a [ joke ]. I hope that answered your question.

Thank you very much, Mr. Chang. I will now leave the floor to Mr. [ Michele Calusa ] from Mediobanca. I was just asking to open his mic. The floor is yours [ Mr. Calusa ]. We cannot hear you.

Even if the mic is opened.

Even if the mic is on. Yes. Okay. I will read them for you. Or maybe we can -- Okay, [ Mr. Calusa ] is writing. Can you provide an update on the status of the Australia project and the first phase of the Taiwan project in Suao?

Sure. Giuseppe, you can help us on that thing?